ComfortDelGro and Uber alliance to breathe new life after losing drivers to Grab

SINGAPORE (Sept 28): CIMB is maintaining its “hold” call on ComfortDelGro with a target price of $2.15.

Recent news of ComfortDelGro’s drivers jumping over to competitor Grab has led to a 5.9% decrease since Sept 15 in the group’s share price which seemed to have priced in taxi margins in the range of 6.4-7.3%.

In a Wednesday report, analyst Cezzane See says, “The market’s conservative view notwithstanding, the stock still lacks longer-term catalysts. Our revised forecasts and DCF-based TP of $2.15 are based on assumed FY17-19F taxi segment EBIT margins of 10.8-8.4% and fleet size falling to 14.0k by FY19F (FY17F: 15.5k).”

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